SF 8 (LSB 1627XS (1) 88)

SENATE FILE 8

BY  ZAUN

A BILL FOR

An Act providing for the sale or lease of the Iowa communications network.
BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA:

    Section 1.  SALE OR LEASE OF IOWA COMMUNICATIONS NETWORK. 
   1.  The Iowa telecommunications and technology commission shall implement a request for proposals process to sell or lease the Iowa communications network. The request for proposals shall provide for the sale to be concluded or the lease to commence during the fiscal year beginning July 1, 2019. 
   2.  a.  Prior to a sale or lease of the Iowa communications network, the state auditor shall conduct a comprehensive audit and accounting of the network to include the following components:
   (1)  A complete financial audit of the network for the period beginning July 1, 2016, and ending July 1, 2019, to identify the revenues and expenses of the network and verify that charges were properly made to all existing authorized users and booked accurately by such authorized users and the network.
   (2)  A complete inventory audit of all components included in the network, including telecommunications-related and non-telecommunications-related property or equipment. Such inventory shall identify the age and condition of property or equipment purchased or leased by the commission for the operation of the network and verify physical connections to current authorized users. 
   (3)  Information identifying and quantifying the value of services provided by the network to current authorized users.
   (4)  Information identifying all current authorized users and business units of the network. 
   b.  Following the completion of the comprehensive audit and accounting required pursuant to paragraph “a”, an independent appraisal firm shall conduct an appraisal of the network to determine the current market value of the assets listed in the audit and accounting. The independent appraisal firm shall be selected through a competitive bidding process not associated with the network or any of its vendors. 
   c.  The results of the audit, accounting, and appraisal of the network conducted pursuant to this subsection shall be made available to the public on an internet site maintained by the commission. 
   3.  A sale or lease of the Iowa communications network pursuant to this section shall be conditioned as follows:
   a.  Public funds shall not be used to secure the purchase of the network.
   b.  If the commission seeks outside assistance to implement the request for proposals process, such assistance shall be provided by an independent professional firm selected through a competitive bidding process not associated with the network or any of its vendors.
   c.  The request for proposals shall include a complete list of all assets subject to the sale or lease, as identified pursuant to subsection 2, which shall not be materially altered after the request for proposals is released for bids.
   d.  The request for proposals shall allow a bidder to purchase the network’s assets relating to the Iowa national guard.
   e.  The request for proposals shall not require a bidder to subsidize the network’s services that are operating at a loss, maintain the network’s billing and procurement system, maintain or employ the network’s employees, or segregate the network’s fiber operations from the bidder’s operations. 
   f.  The winning bidder selected pursuant to the request for proposals shall demonstrate a commitment to serving the citizens of this state and facilitating rural broadband service throughout the state at or above twenty-five megabits per second of download speed and three megabits per second of upload speed. 
   4.  The commission shall submit periodic status reports to the general assembly at three-month intervals, beginning on October 1, 2019, regarding progress made toward selling or leasing the network.
EXPLANATION
The inclusion of this explanation does not constitute agreement with
the explanation’s substance by the members of the general assembly.
   This bill directs the Iowa telecommunications and technology commission to implement a request for proposals (RFP) process to sell or lease the Iowa communications network, with the sale or lease to commence during the fiscal year beginning July 1, 2019.
   The bill provides that prior to the sale or lease of the network, the state auditor shall conduct a comprehensive audit and accounting of the network, including a complete financial audit, a complete inventory audit, information relating to the value of services provided by the network, and information identifying all current authorized users of the network, as specified in the bill. The bill further provides that an independent appraisal firm shall conduct an appraisal of the network to determine the current market value of the network’s assets. Such firm shall be selected through a competitive bidding process not associated with the network or any of its vendors. The bill requires the results of the audit, accounting, and appraisal to be made available to the public.
   The bill conditions the sale or lease of the network as follows: public funds shall not be used to secure the purchase of the network; if the commission seeks outside assistance to implement the RFP process, such assistance shall be provided by an independent professional firm selected through a competitive bidding process not associated with the network or any of its vendors; the RFP shall include a complete list of all of the assets subject to the sale or lease, which shall not be materially altered after the RFP is released; the RFP shall allow a bidder to purchase the network’s assets relating to the Iowa national guard; the RFP shall not require a bidder to subsidize the network’s services that are operating at a loss, maintain the network’s billing and procurement system, maintain or employ the network’s employees, or segregate operations; and the winning bidder shall demonstrate a commitment to serving the citizens of Iowa and facilitating rural broadband service as specified in the bill.
   The bill requires the commission to submit status reports to the general assembly every three months, beginning October 1, 2019, regarding progress made toward selling or leasing the network.